In addition to tonight's new candidate, consider these stocks as possible trading ideas:
DLTR - shares have been consolidating sideways for three weeks. A breakout past resistance at $84.00 could be a bullish entry point.
UNP - the transportation sector is showing strength. A rally past $106.00 could be a bullish entry point on UNP. I am somewhat concerned that UNP might already be short-term overbought with a +8% move from the $98 area.
ALXN - traders can use a breakout past resistance near $70.00 as a new bullish entry point.
CERN - Friday's rally in CERN is a bullish breakout past its 200-dma and the three-month trend of lower highs. The stock could be changing directions.
FDX - the action in FDX looks a lot like the transportation average and the IYT. A rally past $86.00 could be a bullish entry point on FDX.
NEW DIRECTIONAL CALL PLAYS
O'Reilly Automotive - ORLY - close: 81.55 change: +1.44
Stop Loss: 79.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below
Why We Like It:
Most of the major auto parts stocks have been strong performers in 2011. PBY seems to be the exception. ORLY probably has the strongest chart in the group. Shares are consistently building on their bullish trend of higher lows. Now ORLY is poised to breakout past resistance near $82.00 and hit new record highs.
I am suggesting at trigger to buy calls at $82.05. We'll use a stop loss at 79.75. Our multi-week target is $87.00 but the $85.00 level might be round-number resistance so we'll need to stay flexible.
FYI: The Point & Figure chart for ORLY is bullish with a $103 target.
Trigger @ 82.05
- Suggested Positions -
buy the Jan $85 call (ORLY1221A85) ask $0.55
- or -
buy the Feb $85 call (ORLY1218B85) ask $1.60
Entry on December xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 941 thousand
Listed on December 24, 2011